Forum Home Page [see Broadridge note belo

w]

The Shareholder Forumtm

support for appraised intrinsic value realization

of stock investments in

Riverbed Technology, Inc.

 

 

AVR Status

Riverbed reported voting approval on March 5, 2015 by 77.57% of outstanding shares for the company's agreement to be acquired by Thoma Bravo, with participation of the Ontario Teachers’ Pension Plan, at a price of $21.00 per share in cash, as presented in a January 20, 2014 Definitive Proxy Statement. Based on its review of suitability, the Forum will offer support of shareholders wishing to consider appraisal rights for realization of the company's intrinsic value.

 

 

 

 

For a company report relating to the rating report below, see

 

Source: Standard & Poor's Ratings Services, February 12, 2015 report

Riverbed Technology Inc. Assigned Preliminary 'B' Corporate Credit Rating; Outlook Stable; Debt Ratings Assigned

Publication date: 12-Feb-2015 12:39:42 EST


  • Riverbed Technology Inc., a U.S. provider of application performance
    infrastructure and network management products, will be acquired by Thoma
    Bravo LLC and Teachers' Private Capital.

  • Riverbed plans to issue $2.150 billion of debt to finance the
    transaction, consisting of a $100 million first-lien revolving credit
    facility (undrawn at close), a $1.525 billion first-lien term loan, and
    $625 million senior unsecured notes.

  • We are assigning our preliminary 'B' corporate credit rating to Riverbed.

  • We are also assigning our preliminary 'B' issue-level rating and '3'
    recovery rating to Riverbed's first-lien term loan and revolving credit
    facility, and a preliminary 'CCC+' issue-level rating and '6' recovery
    rating to the company's senior unsecured notes.

  • The stable outlook reflects our expectation that the company will
    maintain its leadership position in the wide area network (WAN)
    optimization market and continue to generate positive free operating cash
    flow (FOCF) post-acquisition.

NEW YORK (Standard & Poor's) Feb. 12, 2015--Standard & Poor's Ratings Services today assigned its preliminary 'B' corporate credit rating to San Francisco-based Riverbed Technology Inc. The outlook is stable.

At the same time, we assigned our preliminary 'B' issue-level rating and '3' recovery rating to the company's $1.525 billion first-lien term loan due 2022 and $100 million revolver due 2020. The '3' recovery rating indicates our expectation for substantial (50%-70%) recovery in the event of payment default. We also assigned our preliminary 'CCC+' issue-level rating and '6' recovery rating to the company's $625 million senior unsecured notes due 2023. The '6' recovery rating indicates our expectation for negligible (0%-10%) recovery in the event of payment default.

"Our rating on Riverbed reflects our view of the company's business risk profile as 'fair' and financial risk profile as 'highly leveraged,'" said Standard & Poor's credit analyst Kenneth Fleming.

We base our business risk assessment on Riverbed's continued reliance on its flagship SteelHead product, which faces limited growth prospects in a maturing end market, for most of its EBITDA. The company's strong position in the WAN optimization market, high contract renewal rates, diverse blue chip customer base, and solid cash flow generation somewhat offset these risk factors. The financial risk assessment incorporates adjusted pro forma leverage of about 7x 2015 EBITDA.

In our view, Riverbed has "adequate" liquidity. We anticipate coverage of uses in excess of 1.2x for the next 12 months and positive net sources over the next 12-24 months, even if the company's EBITDA declines by 15%.

We based the stable outlook on our expectation that the company will maintain its leadership position in the WAN optimization market and continue to generate positive FOCF post-acquisition.

We could lower the rating if Riverbed fails to maintain its technology leadership and market share in WAN optimization or if an inability to execute planned post-leveraged-buyout cost-cuts precludes the company from reducing leverage to a level approaching 7x over the next 12 months.


RELATED CRITERIA AND RESEARCH

Related Criteria

Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com and at spcapitaliq.com. All ratings referenced herein can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.

Primary Credit Analyst:

Kenneth J Fleming, New York (1) 212-438-1490;
kenneth.fleming@standardandpoors.com

Secondary Contact: James W Thomas, New York 212-438-0181;
james.w.thomas@standardandpoors.com

 

No content (including ratings, credit-related analyses and data, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of S&P. The Content shall not be used for any unlawful or unauthorized purposes. S&P, its affiliates, and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions, regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities or to make any investment decisions. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P’s opinions and analyses do not address the suitability of any security. S&P does not act as a fiduciary or an investment advisor. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to: research_request@standardandpoors.com.

 


Copyright © 2015 Standard & Poor’s Financial Services LLC, a part of McGraw Hill Financial.

 

 

 

The project supporting investor interests in Riverbed Technologies, Inc. is being conducted by the Shareholder Forum for the benefit of Participants that have reserved Appraised Value Rights ("AVR") Managment, subject to conditions including standard Forum policies that each Participant is expected to make independent use of information obtained through the Forum and that participation is considered private unless the Participant specifically authorizes identification.

Inquiries may be sent to rvbd@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.